Fennec Provides Business Update and Announces Fiscal Year Ended December 31, 2017 Financial Results
March 26 2018 - 6:30AM
Fennec Pharmaceuticals Inc. (NASDAQ:FENC) (TSX:FRX), a specialty
pharmaceutical company focused on the development of PEDMARKTM (a
unique formulation of sodium thiosulfate (STS)) for the prevention
of platinum-induced ototoxicity in pediatric patients, today
reported its business update and financial results for the year
ended December 31, 2017.
"After a decade of working together with leading
pediatric oncology centers of excellence worldwide, last year
proved to be significant for Fennec and for the advancement of
PEDMARKTM, potentially the first treatment available to prevent
hearing loss in children treated with cisplatin," said Rosty
Raykov, President and Chief Executive Officer of Fennec. "The
highly statistically significant results reported by SIOPEL 6
confirming the previously reported data from the proof of
concept COG ACCL0431 study will form the basis of the marketing
applications of PEDMARKTM in the U.S. and EU. To that effect,
we are pleased with the recent Fast Track designation of PEDMARKTM
by the FDA. Having successfully completed the Nasdaq listing
and the $29 million raised in equity financings during 2017, we are
well positioned to fully fund our key strategic activities in 2018
and beyond, and we look forward to sharing our progress throughout
the year."
SIOPEL 6 top line results presented at SIOP 2017 in
Washington, DC.
The SIOPEL 6 study met its primary endpoint. The study
demonstrated that the addition of STS significantly reduces the
incidence of cisplatin-induced hearing loss without any evidence of
tumor protection. Among the 99 evaluable patients, hearing loss
occurred in 30/45=67% treated with Cisplatin (Cis) alone and in
20/54=37.0% treated with Cis+STS, corresponding to a relative risk
of 0.56 (P=0.0033).
The Company also reported top-line data for secondary endpoints
Event Free Survival (EFS) and Overall Survival (OS). With a follow
up of 52 months, 3yr EFS is Cis 78.8% and Cis+STS 82.1%; 3yr OS is
Cis 92.3% and Cis+STS 98.2%.
Safety and Tolerability
In the study, the results showed that treatment was generally
well tolerated with expected adverse events similar between arms as
shown in the table below:
|
|
|
|
|
|
Adverse
event |
Grade |
CIS |
|
CIS+STS |
|
|
|
N |
% |
N |
% |
Febrile neutropenia |
3 |
7 |
13.5 |
5 |
8.8 |
4 |
- |
- |
- |
- |
Infection |
3 |
5 |
9.6 |
6 |
10.5 |
4 |
- |
- |
- |
- |
Hypomagnesemia |
3 |
1 |
1.9 |
1 |
1.8 |
4 |
- |
- |
- |
- |
Hypernatremia |
3 |
- |
- |
1 |
1.8 |
4 |
- |
- |
- |
- |
Vomiting |
3 |
1 |
1.9 |
3 |
5.3 |
4 |
- |
- |
- |
- |
Nausea |
3 |
3 |
5.8 |
2 |
3.5 |
4 |
- |
- |
- |
- |
Financial Results for the Fourth Quarter
and Full Year 2017
- Cash Position - Cash and cash equivalents were
$28.3 million as of December 31, 2017 primarily as a result of the
$7.6 and $21.2 million (gross proceeds) equity financings completed
in June and December 2017, respectively.
- R&D Expenses - Research and development
(R&D) expenses were $0.9 million and $1.9 million for the three
and twelve months ended December 31, 2017, respectively, compared
to $0.2 million and $0.5 million for the three and twelve months
ended December 31, 2016, respectively The increase in R&D
expenses for both the three and twelve months ended December 31,
2017, is primarily due to the manufacturing and CMC expenses for
the potential commercialization of PEDMARKTM.
- G&A Expenses - General and administrative
(G&A) expenses were $1.6 million and $5.0 million for the three
and twelve months ended December 31, 2017, respectively, as
compared to $1.0 million and $2.4 million for the three and twelve
months ended December 31, 2016, respectively. The increase in
G&A expenses for the three and twelve months ended December 31,
2017 relates primarily to non-cash compensation expenses related to
equity incentive expense recognized during 2017.
- Net Loss - Net loss was $2.3 million and $7.0
million for the three and twelve months ended December 31, 2017,
respectively, compared to a net loss of $1.1 million and $2.8
million for the three and twelve months ended December 31, 2016,
respectively.
- Financial Guidance - The Company believes its
cash and cash equivalents on hand as of December 31, 2017 will be
sufficient to fund the Company's planned commercial launch of
PEDMARKTM in the second half of 2019.
The selected financial data presented below is derived from our
audited condensed consolidated financial statements which were
prepared in accordance with U.S. generally accepted accounting
principles. The complete audited consolidated financial
statements for the period ended December 31, 2017 and management's
discussion and analysis of financial condition and results of
operations will be available via www.sec.gov and www.sedar.com. All
values are presented in thousands unless otherwise noted.
|
|
Audited Condensed Consolidated |
|
Statement of Operations: |
|
(U.S. Dollars in thousands except per share
amounts) |
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
December 31, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research
and development |
|
886 |
|
|
|
174 |
|
|
|
1,936 |
|
|
|
472 |
|
|
General
and administrative |
|
1,629 |
|
|
|
972 |
|
|
|
5,015 |
|
|
|
2,399 |
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
(2,515 |
) |
|
|
(1,146 |
) |
|
|
(6,951 |
) |
|
|
(2,871 |
) |
|
|
|
|
|
|
|
|
|
|
Other
(expense)/income |
|
|
|
|
|
|
|
|
Unrealized gain/(loss) on derivatives |
|
206 |
|
|
|
1 |
|
|
|
(134 |
) |
|
|
48 |
|
|
Sale of
Eniluracil |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
40 |
|
|
Other
loss |
|
(4 |
) |
|
|
- |
|
|
|
(8 |
) |
|
|
(14 |
) |
|
Net
interest income |
|
23 |
|
|
|
2 |
|
|
|
47 |
|
|
|
8 |
|
|
Total
other (expense)/income, net |
|
225 |
|
|
|
3 |
|
|
|
(95 |
) |
|
|
82 |
|
|
|
|
|
|
|
|
|
|
|
Net
income/(loss) |
$ |
(2,290 |
) |
|
$ |
(1,143 |
) |
|
$ |
(7,046 |
) |
|
$ |
(2,789 |
) |
|
|
|
|
|
|
|
|
|
|
Basic net
income/(loss) per common share |
$ |
(0.15 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.47 |
) |
|
$ |
(0.22 |
) |
|
|
|
|
|
|
|
|
|
|
Diluted net
income/(loss) per common share |
$ |
(0.15 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.47 |
) |
|
$ |
(0.22 |
) |
|
|
|
|
|
|
|
|
|
|
|
Fennec Pharmaceuticals Inc. |
Balance Sheets |
(U.S. Dollars in thousands) |
|
|
December 31, 2017 |
|
December 31, 2016 |
Assets |
|
|
|
Cash and cash equivalents |
$ |
28,260 |
|
$ |
3,926 |
Other current assets |
|
141 |
|
|
46 |
Total Assets |
$ |
28,401 |
|
$ |
3,972 |
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
Current liabilities |
$ |
1,477 |
|
$ |
369 |
Derivative liabilities |
|
167 |
|
|
33 |
Total stockholders’ equity |
|
26,757 |
|
|
3,570 |
Total liabilities and stockholders’ equity |
$ |
28,401 |
|
$ |
3,972 |
|
|
|
|
|
|
|
|
Working Capital |
Fiscal Year Ended |
Selected Asset and Liability Data: |
December 31, 2017 |
|
December 31, 2016 |
(U.S. Dollars in thousands) |
|
|
|
Cash and cash equivalents |
$ |
28,260 |
|
|
$ |
3,926 |
|
Other current assets |
|
141 |
|
|
|
46 |
|
Current liabilities excluding derivative liability |
|
(1,477 |
) |
|
|
(369 |
) |
Working capital |
$ |
26,924 |
|
|
$ |
3,603 |
|
|
|
|
|
Selected Equity: |
|
|
|
Common stock & APIC |
$ |
146,882 |
|
|
$ |
116,649 |
|
Accumulated deficit |
|
(121,368 |
) |
|
|
(111,322 |
) |
Stockholders’ equity |
|
26,757 |
|
|
|
3,570 |
|
|
|
|
|
|
|
|
|
Forward looking statementsExcept for historical information
described in this press release, all other statements are
forward-looking. Forward-looking statements are subject to certain
risks and uncertainties inherent in the Company’s business that
could cause actual results to vary, including such risks that
regulatory and guideline developments may change, scientific data
may not be sufficient to meet regulatory standards or receipt of
required regulatory clearances or approvals, clinical results may
not be replicated in actual patient settings, protection offered by
the Company’s patents and patent applications may be challenged,
invalidated or circumvented by its competitors, the available
market for the Company’s products will not be as large as expected,
the Company’s products will not be able to penetrate one or more
targeted markets, revenues will not be sufficient to fund further
development and clinical studies, the Company may not meet its
future capital requirements in different countries and
municipalities, and other risks detailed from time to time in the
Company’s filings with the Securities and Exchange Commission
including its Annual Report on Form 10-K for the year ended
December 31, 2017. Fennec Pharmaceuticals, Inc. disclaims any
obligation to update these forward-looking statements except as
required by law.
For a more detailed discussion of related risk
factors, please refer to our public filings available at
www.sec.gov and www.sedar.com.
About PEDMARKâ„¢ (Sodium Thiosulfate
(STS))
Cisplatin and other platinum compounds are essential
chemotherapeutic components for many pediatric malignancies.
Unfortunately, platinum-based therapies cause ototoxicity in
many patients, and are particularly harmful to the survivors of
pediatric cancer.
In the U.S. and Europe there is estimated that over
10,000 children may receive platinum based chemotherapy. The
incidence of hearing loss in these children depends upon the dose
and duration of chemotherapy, and many of these children require
lifelong hearing aids. There is currently no established preventive
agent for this hearing loss and only expensive, technically
difficult and sub-optimal cochlear (inner ear) implants have been
shown to provide some benefit. Infants and young children at
critical stages of development lack speech language development and
literacy, and older children and adolescents lack social-emotional
development and educational achievement.
STS has been studied by cooperative groups in two Phase 3
clinical studies of survival and reduction of ototoxicity, The
Clinical Oncology Group Protocol ACCL0431 and SIOPEL 6. Both
studies are completed. The COG ACCL0431 protocol enrolled one of
five childhood cancers typically treated with intensive cisplatin
therapy for localized and disseminated disease, including newly
diagnosed hepatoblastoma, germ cell tumor, osteosarcoma,
neuroblastoma, and medulloblastoma. SIOPEL 6 enrolled only
hepatoblastoma patients with localized tumors.
About Fennec
Pharmaceuticals
Fennec Pharmaceuticals, Inc., is a specialty
pharmaceutical company focused on the development of Sodium
Thiosulfate (STS) for the prevention of platinum-induced
ototoxicity in pediatric patients. STS has received Orphan Drug
Designation in the US in this setting. For more information, please
visit www.fennecpharma.com.
For further information, please
contact:
Rosty RaykovChief Executive OfficerFennec
Pharmaceuticals Inc.T: (919) 636-5144
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